You can't force them to accept that amount. Continue to work with them and to impress upon them that your funds are limited.
You probably already know this, but, make sure you have insurance in the future. You are lucky that the amount is so low.
You cannot force a party with a judgment to take a lower amount. Continue to try to negotiate with them and work out a plan. They can continue to seek collections against you and any assets you have until the judgment is satisfied or otherwise discharged. If you have significant debts that you cannot pay, you may need to consult with a bankruptcy attorney.
As the other responders note, you have no legal basis to force them to take the reduced settlement amount you offered. They don't even have to accept $800 less than the judgment, but are presently willing to take. However, if you are riddled with debt, and this is one debt amongst many, You may want to tell them that you will give them the $1000 (in a lump sum) now, or you have no choice but to file for bankruptcy. Doing so could wipe out that judgment. They may decide to cut their losses. Whatever amount you settle for, make sure that they give you a document commonly known as "Satisfaction of Judgment" in return for your payment.
Your law school probably has a pro bono program, and someone from the program can try to cut a better deal.
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